Dick's Sporting Goods Reports Mixed Q2 Earnings, Lowers Foot Locker Outlook Amid Challenging Market

Dick's Sporting Goods on Tuesday reported quarterly earnings that missed Wall Street expectations and lowered its outlook for Foot Locker amid what it called a "challenging athletic footwear and apparel marketplace." Dick's stock fell more than 25% in morning trading Tuesday. The company said Dick's stores saw a 4.9% increase in comparable sales for the quarter driven by "broad-based growth" across categories, including strong results from the World Cup. However, Dick's said Foot Locker saw comparable sales decline by 3.6%, leading the company to revise its full-year outlook for the Foot Locker business to a range of flat to down 2%. It still expects the Dick's business to grow between 2.5% and 4%, but the company lowered its overall net sales outlook for the year from a range of between $22.1 billion and $22.4 billion to a range of between $21.9 billion and $22.2 billion. The company reduced its consolidated operating income outlook from a previous range of between $1.69 billion and $1.81 billion to a range of $1.45 billion to $1.55 billion. Here's how Dick's performed in its fiscal second quarter compared with what Wall Street was expecting, according to a survey of analysts by LSEG: Earnings per share: $3.53 adjusted vs. $3.76 expected Revenue: $5.59 billion vs. $5.65 billion expected For the period ended Aug. 1, Dick's reported net income of $315 million, or $3.50 per share, down from $381 million, or $4.71 per share, the year prior. Adjusting for one-time items, including its Foot Locker acquisition, Dick's reported $3.53 per share. Sales rose to $5.59 billion from $3.65 billion in the year-ago period. "While we are taking a more cautious view of the balance of the year, we remain highly confident in the strength of the DICK'S Business and our long-term opportunity at Foot Locker," CEO Lauren Hobart said in a statement. The company also said it received $59 million in tariff refunds during the quarter and $2.1 million in related interest income. The earnings come as Dick's is in the midst of implementing a turnaround for Foot Locker, which has previously weighed on the company's bottom line. Dick's has sought to refine Foot Locker's strategy to return to growth, especially at a time when sportswear is booming.